Improve Credit Score

Paying bills on time is the best thing you can do to improve your credit score. According to FICO, one of the two major credit scoring companies in the United States, payment history is responsible for 35 percent of your score. The other company, VantageScore, doesn’t give percentages but does say that payment history is “extremely influential.” Paying bills late can greatly hurt your credit score, and the later you pay, the greater the damage. Your credit score benefits the most from you making your payments, credit card and otherwise, consistently on time for long periods of time

Enjoy Lower Interest Rates and More Access

Paying bills on time leads to an improved credit score, and an improved credit score leads to lower monthly payments when it’s time to take out a loan. Whether you’re buying a car or getting a mortgage for a house, you can get better interest rates with a higher credit score. Additionally, improving your credit score by paying your bills on time can help you access better products. For example, cellphone providers and landlords also use scores when considering a new customer or tenant. If your credit score is high enough, you could improve your chances of getting that nice apartment that other people are competing over.

Insurance companies will also use your credit score to determine how likely you are to file claims and the amount you might claim. They consider this information when deciding whether to give you insurance and how much to charge.